In an interview in his bright office overlooking St James Park, Balls gives a definitive 'No' when asked if he will taking over the at the Treasury.

"I have been a Minister for less than a year," Balls says.

Adding rather modestly for the official credited with the authorship of many Brownite policies including the creation of an independent Bank of England: "I still have a lot to learn."

Like his boss Balls has a huge capacity for work and is part of the life force which has made the Treasury central to almost every aspect of New Labour's work.

Earlier this week Balls was surprisingly to be found in Ramallah and Tel Aviv seeking to put in place an 'economic roadmap' for the Middle East if and when the Mecca peace deal between Palestinian factions is accepted in Jerusalem and the peace process restored.

From the tortuous politics of the Middle East it was back to London and the first firm spending commitment of the Comprehensive Spending Review - a pledge that budgets for 'social exclusion' would be expanded so that the unbanked and disfranchised in the financial system would be looked after.

Then a lunch for school kids from the Wakefield-Leeds area where Balls has become the ambassador for local grown rhubarb.

With the budget looming next Wednesday, Balls and the whole Treasury have their eyes fixated on the economy and the public finances.

"Public spending is going to be lower in the current spending review than in the last," Balls acknowledges. It looks as if the large scale increases in health spending - projected to reach £89.1bn in 2007-8 - will be the last.

"The Wanless review set out a first five year period of substantial investment followed by a period when the rate of growth would slow," Balls says.

"That is what we are implementing. That has always been clear to the NHS," he adds.

One sign of the sacrifices it may have to make comes from the latest jobless data which shows numbers working in the NHS falling by 11,000 in the fourth quarter.

However, the Comprehensive Spending Review (CSR) for 2008-2011, which will be outlined in the budget, should be better news for education with Brown determined to tackle Britain's skills deficit.

Balls notes that the Treasury is making "tough decisions on administration budgets across Whitehall so we can then release resources for areas we would like to see continued expansion and that includes education".

Balls firmly rejects the sniping which comes from the City and the opposition benches about the management of the public finances and charges of manipulation of the Chancellor's fiscal rules.

He says that international observers from the IMF and others who come to the UK are astonished by the sophistication of the debate about fiscal policy.

"It's like no other country. We have a degree of transparency which we haven't had before.

"Has the Treasury gone out of its way to manipulate the cycle? Absolutely not," he asserts.

"Actually the rules didn't change at all. The numbers changed."

In the City Minister's view the changes in the definition of the economic cycle - which allowed the government to meet the 'golden rule' on borrowing for investment alone - were due to changes in national output not politics.

He rejects Tory calls for reform of fiscal policy as "deeply mistaken".

It is clear from Balls that despite the rising concerns about sub-prime mortgage lending in the U.S. and forecasts of a possible recession from former Fed chairman Alan Greenspan, Brown's last budget will be bathed in optimism after 40 consecutive quarters of output expansion.

"We have an economy that even in a difficult period has continued to sustain growth. Both domestically and internationally we have faced pressures on inflation in the past few months. We have gone through a period of turbulence on financial markets," Balls says.

"Economies like ours in the past few years have shown that these periods of market turbulence can be handled."

Just in case, the Treasury, Bank of England and the Financial Services Authority have been doing "a lot of work" on financial stability in recent months. Fearful of complacency he does warn that it is becoming harder to monitor risk "from the point of view of the system as a whole".

He believes that if you have a strong policy in terms of controlling national debt "you can deal with inevitable ups and downs in terms of tax revenues" and can keep the economy growing.

Balls played a leading role alongside Brown in making the decision, days after Labour won power, to make the Bank of England independent.

Ten years down the line, voices are being raised in favour of an overhaul of the rate-setting regime.

Leading lights, including the Bank’s deputy governor Rachel Lomax, have complained about the opaque and sometimes haphazard way in which Brown makes appointments.

MPC member David Blanchflower’s decision to remain living in the US has raised fears members aren’t as plugged-in as they should be.

Balls rejects demands for a major re-think, describing proposals from Shadow Chancellor George Osborne to give Parliament power to vote on the Bank’s inflation target as "short-termist and destabilising".

He says: "From the appointments of DeAnne Julius and Willem Buiter onwards people have seen that we have appointed high-class people who have been clearly been independent in the way they have acted."

But Balls sounds amenable to a change in the length of MPC members’ terms, which currently stand at three years.

Buiter said last year that longer, single terms would allow members more time to settle into their roles and make an impact.

"On changing the length of appointments, personally I think this is an interesting debate to have. In the beginning, in 1997 we chose three years at a time when we were starting out with a new system."

One of the MPC’s biggest headaches at the moment is the housing market, which is roaring away even as inflation remains close to target.

Balls says talk of housing gloom and doom sounds all too familiar.

To the extent that there’s a problem with the British property market, it comes down the supply of new homes failing to meet demand, he argues.

"People have been talking about a housing market bubble for some years. If you go back two or three years ago, some were predicting a consumer recession and a downturn because they said this bubble was going to burst.

"In fact that hasn’t happened. House prices have stayed strong, but there was a moderation in the rate of inflation following the Bank of England’s comments (in 2004).

"But in my reading of this, this isn’t about short-term financial movements, this is a long-term issue in the British economy, which is that demand for housing has been rising and the supply of housing for a sustained period of time wasn’t keeping pace."

The only time that the ebullient Balls seems lost for words during our interview was when we asked him if had yet developed a replacement for his famous 'endogenous growth theory' so mocked by Michael Heseltine before the 1997 election.

Balls looked flummoxed and batted away the question. As an elected politician of 18 months he has learned some lessons.